North American Free Trade Agreement
NAFTA's proponents promised benefits for the U.S., Canada and Mexico.
Benefits such as new U.S. jobs, higher wages in Mexico, a growing U.S. trade surplus
with Mexico, environmental clean-up and improved health along the border?all have failed to take form.
It is commonly believed that free trade between nations is a mutually beneficial arrangement for all parties involved; indeed, this is held to be an absolute truth. Though free trade is undoubtedly the most effective form of commerce between countries from a purely economic standpoint, increasingly we find that our so-called free trade agreements are horribly unbalanced. Indicative of these fiascoes is the North American Free Trade Agreement (NAFTA). NAFTA is a lopsided and detrimental deal, hastily hammered out by an inexperienced group of American negotiators under constant pressure from the Bush Administration. I will outline several primary concerns about NAFTA, looking at the effects and circumstances surrounding the development of this deal.
In June 1990, president Salinas of Mexico met with president George Bush to discuss a proposal to expand Mexico's maquiladoras program (named for the Maquiladoras Act of 1972: a law designed to exempt international companies from certain environmental and labor laws) by establishing a free trade agreement between Mexico and America, and possibly Canada; anxious to find something to make him look favorable in the upcoming election, Bush jumped at the idea, and immediately began lobbying Congress for fast-track authority to bypass Congressional involvement in the subsequent trade negotiations. That hurdle overcome, President Bush hastily assembled a group of ad-hoc trade negotiators and threw them pell-mell at the professional Canadian negotiators and the high-priced Washington insiders and ex-government employees that had been hired by Mexico. On August 12, 1992, President Bush announced completion of the treaty and hailed it a major U.S. victory; by November, it had been signed into law.
What emerged from these back-room dealings was a monumentally flawed agreement. On the issue of job creation, the central focus of pro-NAFTA campaigning, it is fair to measure NAFTA's real-life results against its supporters' expansive promises of hundreds of thousands of new, high paying U.S. jobs. However, even measured against more lenient do no harm standard, NAFTA has been a failure. Consider this recent opinion poll of Americans on NAFTA's performance:
66% of Americans believe that free trade agreements between the U.S. and other countries cost the U.S. jobs.
66% of Americans believe that NAFTA has helped large corporations.
73% of Americans believe that NAFTA has not helped small business in the U.S.
58% of Americans agree that foreign trade has been bad for the U.S. economy because cheap imports have cost wages and jobs here.
81% of Americans say that Congress should not accept trade agreements that give other countries the power to overturn U.S. laws on consumer safety, labor or the environment.
Clearly NAFTA has led to widespread job loss, with more than 200,000 U.S. workers certified as NAFTA casualties under just one narrow government program. Since the 1970's, there has been a steady trickle of manufacturing jobs heading south of the border; American companies found that moving their factories to Mexico, where the minimum wage is 58? per hour and environmental laws are rarely enforced, lowered their production costs even though the U.S. maintained tariffs on the import of those items. Mexico began to actively seek out U.S. manufacturers in 1972 after the passage of the Maquiladoras Act.
Notwithstanding the fact that job growth totally unrelated to NAFTA has produced a net gain in the U.S. employment picture during this period, it in no way changes the reality that NAFTA has cost many individual workers their jobs?most of whom are now unemployed or working at jobs that pay less than the ones they lost.
Economic surveys of dislocated workers show that the jobs lost to NAFTA, often high-paying manufacturing jobs, are, in the majority of cases, replaced by lower-paid employment.
Consider these alarming facts:
NAFTA has transformed the U.S.'s $1.7 billion trade surplus with Mexico in 1993 into a projected $14.7 billion deficit for 1998.
According to the U.S. Department of Labor, approximately 214,902 American workers have been certified under one narrow program as having been laid off due to NAFTA.
U.S. counties on the U.S.-Mexico border have borne a disproportionate burden of NAFTA job losses. In El Paso, TX alone, more than 10,000